Investment Outlook 2018

At the close of 2017, the year in retrospect has been positive for stock markets.  This is perhaps not what many expected at the beginning of the year, but volatility in political and natural events (a general election, Brexit negotiations, Trump’s presidency in the US, hurricanes...) has not translated to the markets. 

The inevitable question now is how long will this last?  Will values keep going up or is there going to be a crash? 

How long will the good times last?

It’s a question that concerns both individual investors (such as doctors with stocks and shares in ISAs, pensions or other accounts) and the investment professionals.  The view from the professionals is one of cautious optimism.  Global economic indicators are looking good; there is not much sign of a recession around.  And while inflation is relatively high and interest rates are still very low there is little incentive to take money out of the markets to hold as cash instead.

The caution stems from a feeling that ‘what goes up must come down’.  Where professional fund and portfolio managers might address this by putting some money aside in defensive assets like gold and gilts, which generally outperform at times when stock markets are turbulent, individual investors must also decide on the right balance of assets to suit their personal attitude to investment risk.

Quantitative Tightening

One factor that could potentially have an impact in 2018 is the reversal of the quantitative easing implemented by US and UK governments in the wake of the 2008 financial crisis.  The US has already announced it is going to decrease reinvesting in the debt securities it bought as part of quantitative easing as these are repaid.  The effect is of gradually withdrawing the extra money the Federal government injected into markets to keep them moving. 

Quantitative easing was a critical tool in supporting markets after the crisis, so will quantitative tightening undermine them in 2018?  Not according to the experts at Invesco Perpetual, who believe it should be manageable and suggest that as quantitative easing didn’t cause a boom, quantitative tightening is not likely to cause a bust.

Ones to watch

US

The US market is currently expensive having undergone a long, slow recovery.  However, things could pick up further following the Senate’s approval of Trump’s planned tax cuts so the market still has potential for stronger growth.

Emerging markets

Smaller emerging economies such as India and Latin America appear to have the potential for the greatest growth, whereas the rate of growth in China is slowing.  The nuances of these markets are best understood by specialists, whose expertise is available to individual investors through emerging markets funds.

Please note all investments can go down as well as up in value and this article does not constitute advice to buy or sell investments of any kind.

Summary

While it is always possible for something unforeseen to hit the stock markets, it is our view that those investing for the long term (five years plus) will be better rewarded for taking some risk with their money in 2018.  If you have existing investments and/or money to invest please contact us for personalised advice on the most appropriate portfolio for your needs on 0117 966 5699 or richard.higgs@wealthwestmedical.co.uk.

More News
Can doctors trust the rising market? Monday, July 23, 2018
Quote Mark
  • "We have been very impressed with the personal service, attention to detail and comprehensive evaluation of our financial circumstances. We would certainly appreciate ongoing help and support from Richard over the future." Jason Kendall (Consultant in Accident and Emergency), Southmead Hospital
  • "Richard provides a very convenient and personal service. Richard has good knowledge and has the ability to go through reasoning for any recommendations." Tim Mitchell (GP), Montpelier Health Centre
  • "Richard provides an excellent service, prompt and flexible. Although the level of technical knowledge is impressive, answers to our questions are presented in a straightforward manner, without overwhelming us with information." Mary Gainsborough (Consultant in Paediatrics), Southmead Hospital
  • "Richard gives me an excellent personal service in my own home. His advice and explanations have been excellent. Richard also has excellent technical knowledge – who wouldn’t be happy?" Charles Record (GP), Frome Valley Medical Centre
  • "Richard provides an excellent, personal service. He responds very quickly and attentively to queries and very much keeps me up to date with important matters that affect me - such as the latest changes to pensions, investments and taxation. Recommendations are delivered in a timely, effective manner - usually face to face in my own home." Professor Gianni Angelini (Head of Cardiothoracic Surgery), BRI
  • "It is very convenient for me to be seen at home and Richard is very flexible with timings - especially when unexpected things crop up at the hospital. Meetings are friendly and relaxed with my long-term best interests very much at the heart of discussions." Professor Gianni Angelini (Head of Cardiothoracic Surgery), BRI
  • "We have found it far more reassuring having a local adviser rather than a national firm. We have found the service excellent and Richard answers all the questions we want answering. Richard's technical knowledge is excellent, he has detailed knowledge of pensions." Paul Male and Helen Lewis (GPs), Thornbury Health Centre
  • "The personal touch counts for a lot and the willingness to visit us at home is much appreciated. Richard provides an excellent, friendly, accessible service, not encumbered by jargon or salesmanship." Professor Peter Mathieson (Honorary Professor of Medicine), University of Bristol
  • "I can recommend Richard as providing measured, balanced independent financial advice. He listens very carefully and tailors advice appropriately in a knowledge-based manner. He is very accessible and gives his clients time and clarity in order to make the most sensible decisions for themselves based on the available facts." Andrew Medford (Consultant in Respiratory Medicine), Southmead Hospital
  • "Richard now knows me and understands my financial position. I have complete trust in his advice. The level of service I have experienced is second to none. We have received regular reviews in our own home, speedy and thorough advice to any queries." John Rees (General Practitioner, Specialist in Urology ), Blackwell and Nailsea Medical Group
  • "The advice I have received has dramatically altered my personal protection policies for the better and reduced my personal tax liability." John Rees (General Practitioner, Specialist in Urology ), Blackwell and Nailsea Medical Group
  • "I appreciate Richard's local knowledge and the fact that he is in contact with a lot of local general practitioners which is useful for networking. He is also very knowledgeable about the different pension schemes and their pros and cons." Fiona Hayes (General Practitioner) Bristol University Student Services
  • "I have enjoyed the process of dealing with a local advisor and it has not felt like a box ticking exercise. The service has been excellent. The great flexibility to come to my home at a time suitable to my working day has set this company apart from others I have dealt with in the past. The technical knowledge provided has been expertly tailored to my requirements and financial situation. The manner in which it has been delivered has also been first rate. " Beth Harrison (General Practitioner) Montpellier Health Centre
  • "We have regular meetings with the same adviser who knows our profile and keeps our requirements in mind with the plans he makes. The reviews are simple to organise and are always at a convenient time and location." Mike Bould (Orthopaedic Surgeon) Western General Hospital
  • "The service I have received from Wealth West is excellent! they are more personable and accessible than large firms and are not pushy at all. They also have a very good breadth and depth of knowledge." Billy and Annie Headdon (Anaesthetics and Intensive Care Trainee, General Practitioner) Montpelier Health Centre
  • "My experience of the service has been excellent. I have been able to ask many questions and have received excellent advice on my financial situation. The technical knowledge of Wealth West Medical is excellent. Anyone who can help my investments grow in the current environment clearly knows what they are doing. I would highly recommend Richard and Wealth West Medical." Linda Buczek (General Practice Manager) Bishopston Medical Practice
  • "The technical knowledge of Wealth West Medical is very good. Richard keeps up to date with the changes to the NHS pension scheme and new legislation." Melanie Lockett (Consultant) Southmead Hospital
  • "Wealth West Medical offers a friendly, helpful and efficient service. Richard keeps in touch at regular intervals and has a very good knowledge of pensions and investments." Rachel Brown (General Practitioner) Montpelier Health Centre
  • "Richard comes to my house for meetings and it is nice to see a familiar face. He remembers my details, and advises over the long term. Richard has a detailed understanding of my particular pension plan and has explained this very clearly to me. He has also helped me to manage tax payments for annual allowance and pension protection." Hugh Herzig (Consultant Psychiatrist) Southmead Hospital
  • .